Gold Prices Plunge 5.6%, Silver Tumbles 7.4%

U.S. gold prices plummeted 5.6 percent Wednesday, registering the biggest fall since March 2008. The yellow metal has plunged for two straight days, falling a combined $134.60, or 7.1 percent, as investors took profits following six sessions of fast, frothy gains.

"People who made a lot of quick bucks are leaving the trade to return at lower points," Matt Zeman, head trader and strategist at Kingsview Financial in Chicago, was quoted on MarketWatch.

December gold prices plunged $104.00 to $1,757.30 an ounce on the Comex in New York. The metal traded between $1,761.10 and $1,856.80. Gold prices fell 5.8 percent on March 19, 2008.

"This is liquidation from a crowded trade," Adam Klopfenstein, a senior market strategist at MF Global Holdings Ltd. in Chicago, said in a telephone interview that was cited on Bloomberg. "In the short run, there’s more optimism and that doesn’t bode well for gold. Investors have been using gold more as a fear barometer than a proxy for inflation."

September silver prices dived $3.129, or 7.4 percent, to $39.162 an ounce. Silver reached as high as $42.485. Jim Wyckoff of Kitco Metals Inc. wrote the following of the metal in the Wednesday Kitco Roundup:

"December silver futures prices closed near the session low Wednesday on profit taking and long liquidation. Bulls faded Wednesday but no serious chart damage occurred. Bulls do need to show fresh power soon to avoid near-term chart damage. The silver bulls still have the overall near-term technical advantage.

Bulls’ next upside price objective is producing a close above strong technical resistance at this week’s high of $44.295 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the August low of $37.055. First resistance is seen at $40.00 and then at $40.50. Next support is seen at $39.00 and then at $38.50. Wyckoff’s Market Rating: 6.0."

Platinum prices for October delivery dropped $53.80, or 2.9 percent, to settle at $1,826.30 an ounce. Platinum hit an intraday low of $1,817.00 and touched a high of $1,884.70.

Palladium prices for September delivery declined $21.25, or 2.8 percent, to close at $743.15 an ounce. Palladium traded from $742.00 to $765.25.

London Precious Metals Prices

Earlier London precious metals prices dropped as well. When comparing London PM fixing prices from Wednesday over Tuesday, gold prices declined $106.00 to $1,770.00 an ounce, silver fell 80.0 cents to $42.08 an ounce, platinum declined $21.00 to $1,865.00 an ounce and palladium lost $3.00 to $759.00 an ounce.

U.S. Mint Bullion Coin Sales

Sales increased for all but one of the American Eagle coins, according to the latest United States Mint sales figures. The half-ounce American Gold Eagle was unchanged while the one-ounce added 6,000, the quarter-ounce rose 2,000 and the tenth-ounce surged 10,000. In the notable column, the American Silver Eagle advanced by an even 100,000. That was enough to lift its year-to-date sales total to above the 28 million milestone. Just over 34.6 million of the coins were sold in record year 2010.

The following daily, August and year-to-date bullion coin sales are as of 4:54 p.m. ET.

Sales of US Mint American Eagle and Buffalo Bullion Coins

Daily
Gains

August
Gains

YTD
2011

Gold Eagle Coin (1 oz.)

6,000

90,000

659,000

Gold Eagle Coin (1/2 oz.)

0

3,000

61,000

Gold Eagle Coin (1/4 oz.)

2,000

6,000

70,000

Gold Eagle Coin (1/10 oz.)

10,000

55,000

320,000

Gold Buffalo Coin (1 oz.)

2,000

23,500

115,000

Silver Eagles (1 oz.)

100,000

2.7995M

28.071M

Sales of America the Beautiful 5 Oz. Silver Bullion Coins*

YTD
2011

Gettysburg National Military Park 5 oz.

126,700

Glacier National Park 5 oz.

126,700

Olympic National Park 5 oz.

80,700

Vicksburg National Military Park 5 oz.

27,500

Chickasaw Park 5 oz.

15,200

TOTAL

380,400

*The Gettysburg and Glacier America the Beautiful Five Ounce Silver Bullion Coins are sold out. Unlike other investment-grade products, the United States Mint does not provide daily per coin sales totals for the Olympic, Vicksburg, and Chickasaw America the Beautiful Five Ounce Silver Bullion Coins. Their individual totals are as of August 2. The five ounce combined coin totals above (last line) are as of August 22.